The vast majority of the company’s shareholders disregarded charges that El Paso’s chief executive, Douglas Foshee, and the company’s adviser, Goldman Sachs Group Inc (GS.N) , had conflicts of interest that kept El Paso from getting the highest possible price.

More than 95 percent of the shares voted endorsed the deal to combine the two largest natural gas pipeline operators in North America, El Paso said. Shareholders holding about 79 percent of El Paso’s outstanding shares voted on the matter.

The shareholder meeting at a downtown Houston hotel was disrupted several times by protesters shouting objections to the deal. The meeting was originally scheduled for March 6 but was pushed back to give investors time to consider a recent ruling by a Delaware judge criticizing some of the deal’s participants.

“This bad deal was brokered by Goldman Sachs and the winners are Goldman Sachs and Doug Foshee,” chanted one group of shareholders. “The losers are shareholders and pension funds.”

The group was later removed from the meeting by security.

CONFLICTS OF INTEREST

Some El Paso shareholders had sued to stop the buyout, arguing that Goldman Sachs and Foshee had interests in holding down the price for the company.

Goldman advised El Paso on the deal, even though it owns a sizable stake in Kinder Morgan through its private equity arm.

Delaware Chancery Court Judge Leo Strine refused to block the deal in a ruling last week, but criticized the negotiating process as “disturbing.”

El Paso shareholders can still pursue damages if they can prove they did not get a proper consideration for their shares. Goldman took steps to mitigate its conflicts in the deal, putting Foshee in the crosshairs of shareholders. “He’s got a target on his back,” said Larry Hamermesh, a professor at Widener University School of Law in Wilmington, Delaware, and an expert on the state’s law.

He said the ruling found Foshee “was someone who was kind of putting his finger on the scale and in a sense playing into the interest of the buyer.”

Foshee declined to comment directly on the judge’s ruling, citing ongoing litigation, but he told the shareholder meeting: “I strongly disagree with a number of matters in the opinion.”

He said the Kinder Morgan deal was the most effective way to bring value to El Paso shareholders.

“We got the best value available from Kinder Morgan on the transaction,” Foshee said, adding that he “personally negotiated the hardest” for shareholders. Strine disagreed in his ruling.

Even though he allowed the deal to proceed, the judge wrote that Foshee hid from the board that he had approached Kinder Morgan about his interest in leading a management buyout of parts of El Paso that its suitor did not want.

Strine said that Foshee might have tried to curry favor with Kinder Morgan and engaged in “velvet-glove” negotiating tactics in agreeing to accept a lower final bid than what was originally offered. The lost deal value for shareholders was around $534 million, by Strine’s analysis. Foshee almost certainly has insurance coverage that could potentially cover a judgment against him if shareholders win damages in court or forge a settlement, said Kevin LaCroix of OakBridge Insurance Services who blogs at the DandODiary.com. LaCroix compared El Paso to the litigation over the $4 billion takeover of Del Monte Foods Co by KKR and Co (KKR.N) last year. In that case, the Chancery Court temporarily blocked the deal due to a conflict of interest by Barclays, which was advising the food company while providing finance to the buyers. Barclays did not tell Del Monte’s board about the conflict, and it only came to light after shareholders sued. That deal eventually closed, and shareholders reached a settlement with Barclays and Del Monte for about $67 million after lawyers fees, one of the largest cash payments ever stemming from shareholder lawsuit challenging a merger.